We report on the observation of unusually strong interactions in a thermal mixture of ultracold atoms which cause a significant modification of the spatial distribution. A mixture of Rb-87 and Yb-174 with a temperature of a few mu K is prepared in a hybrid trap consisting of a bichromatic optical potential superimposed on a magnetic trap. For suitable trap parameters and temperatures, a spatial separation of the two species is observed. We infer that the separation is driven by a large interaction strength between Yb-174 and Rb-87 accompanied by a large three-body recombination rate. Based on this assumption we have developed a diffusion model which reproduces our observations.